DJI’s Foray into the Enterprise Drone Market

Will its reliance on channel partnerships address the real needs of commercial operators?

QuickTake

THE FACTS: Without the usual fanfare associated with a new product release, consumer drone manufacturer DJI opened up a website (http://enterprise.dji.com) in July 2016 that is dedicated to commercial / enterprise use of their drones. The website lists five industrial uses: agriculture, energy, public safety, media & creative, and building & infrastructure. The pages present use cases, news, and product solutions that showcase their technology, software development kit (SDK), and industry-specific partnerships.
Since that time, DJI has made several announcements that appear – at lease on the surface — to target the enterprise market for drones with end-to-end solutions. This includes announcements for:

• An alliance with drones-as-a-service provider Measure
• A combo aerial package with a specialized Hasselblad camera
• A dedicated drone camera with optical zoom
• A partnership with Propeller Aero for a solution targeting the construction and mining industries.

WHAT’S COOL AND WHAT’S NOT: It’s impressive that DJI understands that they need to upscale their offerings if they want to compete in the growing enterprise drone market. Past product announcements reinforce DJI’s desire to appeal to industrial use. Product add-ons like the Zenmuse XT thermal imaging camera (developed in conjunction with industry leader FLIR) have led to a broadening of DJI’s channel with dedicated enterprise offerings like this one and this one. Product platforms like the Matrice 100, the Spreading Wings product line, and the Agras MG-1 agricultural spraying octocopter all point to an increasing focus on commercial use.

Enterprise drone data service providers have noticed the popularity of DJI drones and recognized the need for a DJI-based solution. Several previously open source code users — including DroneDeploy, PrecisionHawk (DataMapper), and Skycatch — now have dedicated DJI mission planning and data apps that take advantage of the SDK.

As our research shows, DJI leads the general market in small drone sales with a 50% market share in North America across all price points. But in the markets for higher priced commercial drones, DJI does not hold that advantage – even in the media and creative market that is their specialty. In those markets, where drone solutions cost more than $7,500, DJI’s market share drops to 33% and goes down to 18% for even higher priced solutions. So, their strategy to grow product sales via partnerships makes sense.

However, what’s exceptional has yet to be fully developed and what’s already released seems out of focus. For example, DJIs investment in Hasselblad has so far only yielded the A5D & DJI M600 bundle – a bundle that DJI does not list on their enterprise site and a bundle which DJI expects Hasselblad to position and market. As a follow-up I called several Hasselblad dealers to see who would buy it and I got some pretty shaky answers to say the least. To this day, I’m still in doubt about who is the real buyer and what will be the volume of sales.

THE COMPETITION: On the surface it seems like DJI is making the right moves. But look closer, and you will find it’s clear they don’t understand the markets they’re targeting, don’t understand how much their competition is entrenched already with the customer, and don’t understand solution selling. I liken it to Apple when it first started trying to sell to enterprises. When enterprises soon realized Apple mobile products didn’t meet their security requirements or their workflow and data storage needs, third-party vendors filled the gap.

In a recent series of white papers called “The Truth about Drones in…” I wrote about the vendor competition in the industries DJI wants to target. For example, in The Truth about Drones in Construction and Infrastructure Inspection, I discuss how investors are already taking positions. In June 2016, Kespry closed a $16 million Series B round, and software company Autodesk Inc. (via its Forge Fund) made an investment in drone manufacturer 3D Robotics. The report also discusses how brands like Leica Geosystems, Lockheed-Martin, Riegl, Trimble, and Topcon are much better known among aggregates and construction companies. I could go on about how hard it will be for DJI (or anybody else) to differentiate its current technology from other vendors that provide drones for the same markets and industries they want to serve, but you get the point.

BOTTOM LINE: It’s pretty safe to say that DJI’s current strategy of repackaging and repositioning existing products to “fit” the enterprise market is not a winner. Mind you, DJI does make and sell some great products, but as we have seen so far, they are wholly dependent on others to provide customer solutions. It’s up to their channel partners to figure out the customer problem being addressed and how to bundle a solution. The poster child for this in the surveying and mapping market is Phoenix Aerial Solutions, which packages up LiDAR drone solutions.

One thing is for sure. With so much dedication to R&D we will see more products from DJI to support the enterprise market this year and next — and we will see their channel partnerships flourish. However, don’t expect to see a fully supported turnkey survey grade LiDAR drone solution from them anytime soon.

Colin Snow is CEO and Founder of Skylogic Research, LLC (aka Drone Analyst®), a research, content, and advisory services firm for the commercial drone industry. Colin is a 25-year technology industry veteran with a background in market research, enterprise software, electronics, digital imaging, and mobility.